The Smart Player in Semiconductor Industry
Date: Thursday , December 01, 2011
Growing from 60 to 600 plus people in a short span of three years in an extremely mature and competitive industry sounds like a dream. Well, it all happened at SmartPlay, a technology services provider based out of U.S. and India. By mid 2008, global economic crisis had started affecting every industry in general and the semiconductor industry in particular. With low profit margins and high cost of operations, even the industry giants were not spared the impact of recession. While most companies struggled to keep themselves afloat, Pradeep Vajram took a bold step by setting up SmartPlay, an End-to-End design services company. The decision indeed was bold for this was a space with several already well established players.
So what prompted him? Lack of depth in value addition provided by existing service players to their customers, he says.
With over 20 years of experience and stints at LSI Logic and Qualcomm, Vajram is fully aware of the needs and demands of the semiconductor industry. It was during his tenure as VP engineering at Qualcomm, where he headed its India semiconductor division that he came across the challenges faced by the semiconductor industry. While looking for service providers in this space, he saw a gap between customers’ requirements and service providers’ offerings. Most of the chip design service providers in the industry did not have the ability to provide value-added end-to-end design solutions. This inspired Vajram to found SmartPlay.
With this, Vajram stepped-in in an extremely challenging and dynamic semiconductor marketplace to fill the void and support the customers with end-to-end design solutions and strong technology expertise. Thus began the journey of SmartPlay, which still stays true to its conceptual vision of providing end-to-end solutions (semiconductor, embedded software and system design) services.
Since the semiconductor industry is broad in terms of the market it caters to, SmartPlay decided to initially focus on providing its services to Fabless ASIC companies on IC design implementation. The fact that the executive team's expertise lie in this segment, gave an initial boost to the company and helped it to expand to Embedded Software and System Design. Within few months of establishment, SmartPlay added Embedded Software & System Design services, thus providing a one-stop shop for product engineering outsourcing. Decision to focus on mobile services was strategically right and enabled a young company like SmartPlay to expand in a fast-growing market segment.
Towards achieving this goal of End-to-End services, the company continues to build strong expertise to address IC Design Implementation (Architecture to GDSII for Digital/Analog products), Mobile Software (Firmware, Middleware & Application Layer) & Mobile System Development (Board Design, User Interface, Mechanical Design).
Smartplay’s core strength lies in the deep understanding of the services industry which also defines its vision. From, day one, the leadership team is focused on value creation leading to be more strategic with its investments. Since the inception of company, a number of strategic alliances & investments have been made with leading technology providers, enabling it to engage at a higher level with customers. “We are a key partner to a leading technology provider for developing and executing IP test chips in advance process node which spans from architecture to silicon test support. Similarly on mobility solutions, we are a part of a selective few vendors to support Android ecosystem for a leading mobile technology provider,” says Sanjay Palsamudram, COO, SmartPlay.
By virtue of these strategic initiatives and investments, SmartPlay is seeing increased traction on its turnkey solutions. One such engagement is a multi-man year TD-SCDMA test infrastructure development for a leading mobile chipset provider. This engagement was implemented successfully benefiting the customer in significant cost savings as well as meeting time to market pressures.
The company makes it a point to understand individual customer's needs, evaluate options and propose alternate solutions. Depending on the customer needs, It also has multiple delivery models, including onshore, nearshore & offshore, to engage with globally. This is reflected by its Fortune 500 clientele including the top tier fabless semiconductor companies.
It is while talking about the company’s vision of End-to-End services that Vajram touch bases on the service offered for a customer that spans across the divisions that includes silicon design, software and reference design activities. Within each vertical, the team works with a customer at a much deeper level of engagement. One such example is that during the recent down and owing to budget constraints, SmartPlay worked closely with the customer to optimize the costs for a test infrastructure engagement.
Typically, test infrastructure has two components, hardware and software. Hardware is a onetime cost while the software is that that of a licensing model. "SmartPlay stepped in and analyzed the feasibility of developing the software infrastructure and compared the cost of development against the purchase of a commercial solution. The proposed solution included leveraging the existing hardware and the total solution resulted in significant cost savings running into multi-million dollars for the customer. SmartPlay started with UMTS test technology and has now expanded into multiple other technology domains such as TD-SCDMA and LTE," says, Vinod Kaushik, VP- Business Strategy, Mobile Technologies, SmartPlay.
Rising above the challenges
What stands perhaps unique in SmartPlay’s journey is its successful run despite having begun its operations in the midst of the downturn. Vajram is no stranger to the drills of being an entrepreneur and to the challenges of a startup. Earlier, he had co-founded Spike Technologies, a chip design services company, and built it into a successful company that was subsequently acquired by Qualcomm. “Soon after we started, the situation was fragile as our customers had significantly reduced their budgets by almost 30-40 percent. This meant that we had to optimize our cost of providing services by a large margin” explains Vajram, CEO, SmartPlay. Being 60 people strong the company was at cross roads to take a very significant decision — either downsize the company or look for an alternative path to reduce operational cost to grow.
The senior management unanimously decided to optimize the costs and devise a strategy to grow in such extenuated circumstances. Downsizing is a seemingly easy solution to cost optimization; however, SmartPlay achieved this without downsizing and by innovative collaboration with employees and customers. Significant sacrifices were made across the board to achieve the target cost optimization. As a result, the company managed to meet the customer’s budget requirements, win new customers and by end of 2009, attained a 300 percent growth.
“This indeed was a great step which exhibited the loyalty that the employees had towards the company. This did not go unrecognized by the management, once the industry showed signs of recovery, our employees were rewarded for their sacrifices,” beams Vajram.
Additionally on the business front, the company executed everything that was demanded by the customers with utmost care and this execution excellence gave it a significant boost. As a result, the company was successful not only in getting repeated business from existing customers but also in winning many new clients. “2009 turned out to be an exceptional year for us,” Vajram reminisces. However with the happy times came a dilemma! Once the recession was over and industry revived, the question arose, ‘What if the customer that has enjoyed services at low prices refuses to accept the new market price?’ This would become a major issue and Vajram had been warned about such a possibility by some of his friends in the industry as well.
But he believed that the customers would understand the SmartPlay value proposition and market conditions. “Though some of the customers were slightly reluctant at first about the revised pricing, they soon learned that they could not find the similar level of service at recession level pricing and continued to work with SmartPlay. For some customers, this migration to the revised pricing took about 6-7 months” he says.
Secret of Success
There are many ingredients to building a successful company. For SmartPlay, the key ingredient is its senior executive team that is strong in both technology and management. In addition, the most important factor contributing to this success is "transparency & trust".
The company lets its customers know up front what it can deliver and what its limitations are. Broken promises or false hopes are never part of the equation and facts are always presented the way they are. This acts as the cornerstone for trust. Then comes the high quality service which cements the trust and paves way for the growth of the company and its clients. The company has built its foundation on the pillars of employee satisfaction, value creation and customer relationship.
This, along with the execution excellence, has contributed to the growth of the company. Today, SmartPlay has grown from the one design center in Bangalore to seven design centers around the globe with customers ranging from Fortune 500s to startups.
Let the Right One in & Make Sure they Stay
Employing the right people is a critical success factor more so for startups. SmartPlay understands what really matters to people when it comes to a choosing a company. There are three key components that matter to employees. They are career growth, market standard salary with long term benefits and most importantly, for engineers, to work on cutting edge technology. Since SmartPlay works with global clients who deploy state of the art technologies, employees are presented with an opportunity to work on cutting edge technologies at multiple geographic locations.
SmartPlay has worked out certain methods to compensating its employees beyond their fixed salary. Performance based incentives, long term benefits, and company performance bonuses are all a part of this effort. The company works very hard to keep its work environment attractive for new employees and at the same time the management makes sure that the existing employees do not feel stagnated, stay engaged and comfortable. “What has interested job seekers in the early days of SmartPlay is not the office buildings but the founding team. They looked at the management team and then decided whether to come onboard or not. To a large extent the credibility that our background brings forth gave an initial standing,” says Vajram. Since the company attained the momentum, it has put significant focus on building its offices. All the offices are designed keeping comfort as the primary goal and with state of the art technologies.
This apart, what motivates the employees to continue their journey with the company is the unrelenting dedication and care the management has for their well being. Be it with in the office or at the client site, the management takes a personal interest in ensuring that every employee is comfortable and taken care of. “I am very proud to be part of SmartPlay. The encouragement, support and the guidance extended to me by the management team is tremendous. SmartPlay has helped me pursue my career goals and achieve professional satisfaction and growth” says Manjula S, Resource Manager at SmartPlay. Despite being 600 plus people strong, the management has been successful to keep the atmosphere transparent and follows an open door policy with the people, irrespective of what part of the hierarchy they belong to. An annual get together with people flying down with their families from across the different locations, team outings, cultural activities and many such team building exercises have benefited the company in building a strong and connected family within the organization.
“Working at SmartPlay has been an enriching experience. Commitment level from the management towards the customers and employees coupled with an open door policy is a great driving force. Technical depth that the colleagues carry ensures learning all the time. Lots of fun, play and parties alleviates all stress. Working here has definitely helped me take another step in realizing my career goals. I am quite excited to be part of this team” says Gaurav Jalan, Engineering Manager, SmartPlay. SmartPlay’s talent acquisition and retention strategy has been very successful, evident from the fact that it has, in a short time, grown from mere 60 people to 650+ people. It now expects to cross the 800 employee mark soon and add new service segments in the coming years.
The Sum of all Things
Significant domain expertise, end-to-end service offerings, innovative business models, sheer focus on customers and their needs, and an utter passion to hire the best and retain them, has helped SmartPlay reach where it has reached now. It is the combination of all the above that helped the SmartPlay to live through the worst recession the world has seen in several decades, and attain the success it has attained. With its strategic approach to cater to the needs of both the customers and its employees, SmartPlay continues to grow rapidly year on year. Vajram and his team have indeed played smart!
Having successfully combated the recession with careful strategizing, SmartPlay has had a dream run that many startup young companies can only dream of. Pradeep Vajram shares what he has envisioned for the company to take it to the nextlevel.
The global economy again seems to be entering into troubled waters. What strategies are you setting in place to keep SmartPlay trouble free?
At SmartPlay we continue to experience solid business opportunities. Today, SmartPlay has a much wider customer base and service portfolio. Given the current state of the company, we are in a better position to weather out any potential down turn when compared to 2008-2009 recession. We are in general very cautious in our spending, especially, when it comes to fixed recurring expenses that can impact our overall cost of operations.
What cutting edge technology developments do you fore see SmartPlay providing its customers?
In semiconductor we are working on low power implementation methodology for 28 nm and below technologies. In mobile segment, we see a great opportunity in LTE and Android so continue to strengthen our expertise in this area.
Does SmartPlay look to venture out to other market segments apart from Semiconductor and Mobility?
Yes, we are studying and analyzing several new service segments. We expect to finalize our decision by Q1 of 2012 and start venturing into the one of these upcoming segments.
What is the broader vision you have set for the company in next five years?
Our goal is to be the best in what we do. Growth is the byproduct of being the best. In next five years, our vision is to be the best product out sourcing partner to our global customers and continue to invest in upcoming technology service segments.